Entertainment Tax in India

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In India, entertainment tax is levied on every financial transaction that is related to entertainment such as movie tickets, major commercial shows and big private festivals. As per the Indian Constitution, entertainment is included in List 2.
This revenue is reserved primarily for the state governments.

Following are some other forms of entertainment that are included in the purview of entertainment taxes:

  • Amusement parks
  • Video games
  • Arcades
  • Exhibitions
  • Celebrity stage shows
  • Sports activities

Entertainment Tax in India- How it started?

In the pre-independence era, the British government levied huge taxes on events centered on entertainment or amusement. The basic idea was that there could be a public rebellion at such events as they saw huge gathering of Indians in a politically sensitive and critical time. These laws are still in effect in some states and are yet to be repealed or revised.

Contribution of Entertainment Tax in India

The states have started to generate higher incomes after the Paid Television Services began in India. At present there are some other sources through which state governments get their income tax related income:
  • Broadcasting services
  • Pay TV services
  • DTH services
  • Cable services

Entertainment Tax Rates in India for different states

The following entertainment tax rates in the various states across India:

Sr No State Entertainment Tax Applicable on Gross Tkt Value
1Andhra Pradesh 20% (15% for Telugu Films)
2Assam, Himachal Pradesh, Jammu & Kashmir, Punjab and Uttaranchal Nil
3Bihar 50.00%
4Delhi 20.00%
5Gujarat 20.00%
6Haryana 30.00%
7Jharkhand 110% (Nil for Jharkhand Films)
8Karnataka 30% (Nil for Kannada Films)
9Kerala 30.00%
10Madhya Pradesh20.00%
11Maharashtra 45% (Nil for Marathi Films)
12Orissa 25.00%
13Rajasthan30% (Nil for Rajasthani Films)
14Tamil Nadu 15% (Nil for Tamil Films)
15Uttar Pradesh 30% to 40%
16West Bengal30% (2% for Bengali Films)

Implementation of Entertainment Tax in India

In India the aspect of entertainment is an intrinsic part of several transactions and services - this is done in such a way that the matter cannot be separated from the service or transaction itself.

Entertainment Tax in India- Collecting Authorities

In India, state governments are primarily responsible for collecting the entertainment taxes. However, the union government can also collect these taxes on the basis of the type of transaction.

The basic financial principle, which separates the entertainment taxes to be collected by the union government and ones under the jurisdiction of the state government, is mentioned in the Article 246 of the Indian constitution. This part also highlights the entertainment taxes that can be collected by the union governments and the states.

The article also states that in case there is a conflict between the Union Government and the State Governments regarding an entertainment tax, the Union will have greater power in imposing the tax.

Last Updated on June 12, 2015

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